Delhi High Court
S. Sony & Co. vs Delhi Development Authority on 17 December, 1993
Equivalent citations: 1994IAD(DELHI)118, 1994(1)ARBLR190(DELHI), 53(1994)DLT267, 1994(28)DRJ109
JUDGMENT J.K. Mehra, J.
(1) These are objections on behalf of the Delhi Development Authority (hereinafter referred to as "DDA" under Sections 30 and 33 of the Arbitration Act to the award of Shri R.K.Sundram, Sole arbitrator dated 16th March 1990. The award is in respect of the claims that arose out of the contract for plumbing and sanitary work in the players block of Indira Gandhi Indoor Stadium Complex which was to be used for the Asian Games.
(2) Notice of the filing of the award was served on Dda on 17.9.90 and the present objections by Dda were filed on 17th October 1990. Thus the objections appear to be within time. The claims appear to be based on alleged loss of profit suffered by the petitioner on account of foreclosure of the contract.
(3) I have heard the parties in respect of each of the claims. In the objections Filed, there is no objection filed to any other claim.As suchexceptforClaimsNo.1,2,10and 11 the award is acceptable to the respondents. At the bar also, the respondent's counsel conceded that there was no opposition to the award in respect of Claims No.3,to 9 and in the light of legal position as settled the objections Nos.10 and 11 are not pressed and the counsel agreed to confine his submissions to the award mainly on Claims No. 1 and 2.
(4) At the out set the objector raised a plea of delay in rising the claim..This question is necessarily a matter to be considered by the Arbitrator on evidence. I find from the award that the arbitrator has duly considered this aspect in the light of the material placed before and submissions addressed to him. Detailed arguments were advanced by both sides and the main thrust of the petitioner's argument was that it was the respondent-objector who was guilty of delay, firstly, in not handing over the site and thereafter not supplying the petitioners with drawings in time despite repeated reminders.. The petitioner has contended that respondent/employer cannot take advantage of their own wrong when they themselves are instrumental by their conduct in delaying the execution of work. They could not attribute any negligence to the petitioner nor could they deem the contract as repudiated because there is no communication from objector/respondent which would in an unqualified manner show that the contract had been repudiated and such repudiation was within a reasonable time. Having not done that it did not lie in the mouth of the respondent to claim deemed repudiation. He had cited various authorities including Hudsons "Building and Engineering Contracts" 10th Edition, which on page 345 (SECT. 3) lays down "The exercise of the right to treat the contract as repudiated must be unqualified and made within a reasonable time", and Erndens "Building Contracts and Practice" 8th Ed. Vol.l, which on page 58 (Chapter 3) lays down "...and what must be ascertained is what is to be taken as the intention which reasonable person would have had if placed in the situation of the parties". He has further cited Chitty on Contracts, 25th Edition., to support his contentions, wherein on page 1510 has been observed as under:- "THE parties may expressly provide that the contract shall ipso facto determine upon the happening of a certain event. But such a provision is subject to the principle that no man can take advantage of his own wrong, so that one party will not be allowed to rely on such a provision, where the occurrence of the event is attributable to his own act or default."
(5) A perusal of the award show's that it is based on reasons which have a nexus with the material including documents placed before the arbitrator. It is not the province of the courts to look into the correctness or otherwise of the reasons unless such reasons are totally unsupported by any material on record and are perverse which is not the case here. The court is also not to look into the sufficiency or insufficiency of the evidence.
(6) It has been repeatedly laid down in various authorities that the courts do not exercise appellate jurisdiction over the verdict of an arbitrator and as such cannot re- appraise the evidence or go into the merits of the case. The Courts also cannot look into the sufficiency or insufficiency of evidence led before the arbitrator in respect of any claim. Even in the cases.where the Arbitrator has been required to give reasons or chooses to give reasons for his award, he is not under an obligation to give very detailed judgment or reasons, and by the words "furnishing reasons", it would commonly be understood to mean that the award should be speaking award whereby the arbitrator should indicate his mind saying as to how he has reached a particular conclusion. Thus, the arbitrator in a reasoned award is required to indicate the trends of his thought-process, but not his mental meanderings. By this, I do not mean to say that even where an award is made without its being based on any evidence whatsoever the courts cannot interfere with it. In my view, in such a situation the award would be invalid being perverse and the courts would be within their jurisdiction to interfere with such findings if on the face of the award, it does not appear to be based on any material to support the conclusions. But on facts, the arbitrator is the authority whose decision is final and the courts would not be justified in interfering with every wrong or incorrect decision on facts unless it amounts to an error of law apparent on the face of the award.
(7) It is also not for the courts to see the reasonableness of the reasons given by the arbitrator or sufficiency or insufficiency of the reasons. A reference in this connection maybe made to the decisions in Allen Berry and Company (P) Ltd. Vs. Union of India: reported as , Hindustan Tea Co. Vs. K.Sashikant Co.: reported as and Coimbatore District Poda Thozillar Sangam Vs. Bala Subramania Country and others: reported as , where the Hon' ble Supreme Court has repeatedly held that:
"AN award can only be set aside where there is an error on its face. Further, it is an error of law and not mistake of fact committed by the arbitrator which is justiciable in the application before the Court. It is an error of law and not mistake of fact committed by the arbitrator which is amenable to corrections by the Court."...................................
"WHERE the alleged mistakes or alleged errors, if there be any of which grievances were made were mistakes off acts if at all, and did not amount to error apparent on the face of the award, the objections were not sustainable and award could not be set aside."
For the reasons set out hereinabove, I am not inclined to accept the objections on Claim No. 1.
(8) In respect of claim No.2 also the main objection raised at the bar is that it was not based on evidence. This again on scrutiny is found to be incorrect.I find that the arbitrator has based his findings on evidence which was placed before him. It was primarily a finding of fact of which the arbitrator is the final arbiter and the courts cannot interfere with the Finding based on evidence unless the same are perverse. It was in the light of those reasons that he had proceeded to grant the claim in favor of the claimants and I do not find any reason to interfere with the arbitrator's award in the present case. Nothing else has been shown in support of the argument that award in respect of Claims No. 1 and No.2 should be set aside. The Respondent has not been' able to. prove that the arbitrator has misconducted himself or the proceedings.
(9) Although orally it was pointed out by the counsel that there was a delay of four years and hence the claim was barred by time, I am unable to accept this submission because it was only in 1987 that according to the respondents themselves vide their letter Ext R-3 the work was fore-closed and apparently it must have been for that reason only that no plea of limitation was raised either before the arbitrator or in the objections under consideration.
(10) Claims No. 10 and No. 11 relate to award of interest by the arbitrator. The objections to the said claims cannot be sustained in view of the settled law that the arbitrator can award the interest including pendentelite interest in arbitration proceedings.
(11) I find no merit in these objections.The same are dismissed.Award is made a rule of the Court. Let a decree in terms of. the award be drawn up. The award shall form a part of the decree. The petitioner shall also be entitled to future interest @ 12% p.a. from the date hereof till the date of payment and costs.